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Pondering the Ideal Location

Howard Scott |

When it comes to choosing a good store location, everyone seems to have plenty of ideas. The keys to choosing a good location are density of population, with a high percentage of renters; absence of a good competitor in the area; and finding a spot that’s visible and accessible.This sounds simple enough, but ensuring a good location and a successful business still requires some work on your part.CITY/SUBURBAN SETTINGSLet’s take a closer look at these ideas one at a time. Basically, in an urban setting, you’re looking at an area of city blocks, perhaps the square mile around your proposed site. Most urban areas have adequate population density.If you’re in the suburbs, you’re looking at a town. If the town is already serviced by a Laundromat, is there enough population to support another business? Or can you gain the lion’s share of business by being a better operator, and by being more centrally located? If there is no Laundromat in the area, you must ask why.That brings me to the second issue: the renters. Obviously, most cities will have a higher renter population than suburbs. But you must go out into the marketplace and do your due diligence. Go to apartment buildings, knock on doors, and ask about laundry facilities. Ask what the people do about their laundry. You might be surprised. Some might have solutions — a public facility, for example.Don’t assume a high rental rate guarantees an adequate customer base. Go to the town hall and find out the population. Officials also might be able to give you the percentage of renters. In an urban setting, you want to see about a 40% renter population. In a suburb, you want to see at least 10%.Then there might be other potential markets. For example, a heavy lake-cottage population might need to conserve water, and thus become Laundromat customers. Or, you might discover that a high transient population provides extra business. Try to estimate the percentage (out of the total population) of potential users.With these figures — population and percentage — determine your potential customer base. Is it adequate for your operation? Can you build a business with this type of base?In both urban and suburban settings, an ideal site is where there is a convergence of people. A busy shopping area, with a drugstore, supermarket, and hardware store, is a good bet. Where people go to attend to their needs is the key. A busy shopping center is an ideal spot because the customer can run other errands while doing the laundry. On the other hand, a shopping center is typically expensive in terms of square footage.COMPETITIONCompetition must be addressed. It’s more than the number of competitors; it’s the quality of the competition. Is there a sharp operator who runs a quality Laundromat in your proposed market? Is there a good operator in a neighboring area where much of the business goes? If the answer is no — if there are just tiny, messy operations — then these operators don’t count for much. Over time, you will win the majority of business because your operation is clean, brightly lit, staffed or serviced, and efficient. This is true for both urban and suburban markets.DRAWING ATTENTIONFinally, assess your proposed site. Will it catch the eye of passers-by? Is there ease of egress and ingress? Nothing annoys drivers more than having difficulty pulling in or out. Is there adequate parking? In general, foot traffic is less important than customer flow, which is the movement of people doing their business. Is the area safe? If the area is dangerous, is there some reason to expect the store area to be safe? Is it near a police station or a place where people walk day and night?Sometimes it helps to examine a marketing area. In my neck of the woods, which consists of 19 communities south of Boston, there are 20 Laundromats. You might think this means one for each town, but that isn’t the case. Nine towns are not serviced by a Laundromat. That’s because the towns are well-to-do, have zero renters, are well-serviced by a neighboring town, or have a small population. The two wealthiest communities, Cohasset and Milton, have no Laundromat. Plympton, a small town of 2,500, has no store because the population shops in nearby Carver. Ten of the communities have one or more Laundromats. Four have two, one has six, six have one. Therefore, five towns have 70% of the facilities.The towns with two or more Laundromats are all working-class towns with solid rental populations. Weymouth, the town with six stores, is vastly spread out with distinct sections — East, North, South, and the Landing. Each of the Laundromats draws from a village or section.A shrewd laundry operator told me his formula: “I stand at the proposed site and envision the marketplace. I picture who will come to me and why. I go into the minds of customers who will travel the extra distance, not going to their across-the-street Laundromat, but rather to my store. I look at the lay of the land the way a mapmaker would, only I’m searching for flows of customers instead of flows of rivers or piles of mountains. I see the way people will enter my store and park their car. All this takes place outside the store, not inside, even though it is the inside that gets them there. I think of the stores in the area that will get them to come this direction.“Of course, this is after I’ve done my research — determined in my mind that there are enough potential laundry customers in the area. I keep standing in that spot until I feel that I have a winner. When the emotion comes, that’s my ‘go’ button. My method might not be the most scientific method, but it’s worked over 30 years in the business. Out of the 25 stores I’ve owned, I’ve been on the money about 85% of the time.”Having given you guidelines, I want to suggest that sometimes the rules can be broken. I know of a fairly successful Laundromat owner whose store isn’t on a main street. It’s in an area that might almost be classified as an industrial center. You wouldn’t know it was there unless you knew of it. There is no consumer flow and no attracting stores. Yet, it manages to service a large territory of the population.So, if you think about my rules, and go by your gut, you should end up with a winner. 

About the author

Howard Scott

H&R Block

Industry Writer, Drycleaning Consultant, and H&R Block Tax Preparer

Howard Scott is a longtime industry writer and drycleaning consultant, and an H&R Block tax preparer specializing in small businesses. He welcomes questions and comments, and can be reached by writing Howard Scott, Dancing Hill, Pembroke, MA 02359.

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